Traffic Think Tank: a six-year side-hustle SEO community sold for $1.8M, with 40% paid later

In February 2023 Traffic Think Tank, a paid community for SEO practitioners, was sold to Semrush, a listed marketing software company. The price was $1.8M. The founders never stated it, and the figure surfaces instead in the quarterly report (10-Q) the buyer filed with the US Securities and Exchange Commission. The filing includes the breakdown. $360K would be paid after 12 months and another $360K after 18. What moved at closing was $1.08M, or 60% of the total.

Three co-founders ran it, and for roughly six years all of them kept full-time jobs. The essay by co-founder Matthew Howells-Barby carries the title “How We Sold Our Side Hustle to a Public Company.”

Read only that line, a side project bought by a public company, and the picture is of a sale at the end of steady growth. The actual figures point the other way. At the end of 2019 ARR stood just under $1M. At the sale, outside accounts put annual revenue at roughly $1M. What was sold was a business whose order of magnitude had not moved for about three years.

From a 15-person private group to a public company’s 10-Q

An interview in Search Engine Journal gives the membership cap as 1,000. The They Got Acquired write-up puts paying members at about 750, so the cap was never filled.

A $99 friction filled the first 100 seats in a week

The start was cautious. Membership was capped at 100, the plan assumed shutting down if demand could not be confirmed within three months, and $99 a month was charged from day one. Howells-Barby writes that they avoided a free tier to cut spam and add a step of effort to joining. It was a price set knowing it would slow growth. The announcement went out through the three founders’ personal email lists and social accounts, and 100 seats filled in under a week.

Acquisition afterwards relied almost entirely on referrals: about 95% of new members came through word of mouth. They turned down selling paid promotion inside the members’ courses, and they turned down affiliate revenue from recommending tools. Referral fees from software are an easy income stream in the SEO world, but taking them would have compromised impartiality, and he writes that member NPS backed that call. In their place sat a perks section where vendors offered members discounts at no charge.

This construction can be stated flatly. What the community sold was not information but a place with no scent of referral fees. Semrush’s 10-Q names the purpose of the purchase as the brand and content, which reads most naturally as buying the name attached to that place.

ARR just under $1M at the end of 2019, and about $1M at the sale

The weak spots sit in the same record. In 2019, the year the first in-person event sold out 150 tickets, ARR came in just under $1M and NPS hit its high. From there to the February 2023 sale the order of magnitude did not move. The outside estimate of about $1M in annual revenue, and the calculation that the price was 1.8 times revenue, both assume that plateau.

In 2020 several larger companies made approaches and the three declined almost all of them, because they still saw a path to growth. By the end of 2021, though, the choice had narrowed to hiring, possibly acquiring, and pushing for growth, or else selling. He writes that staying in the middle meant stagnation or decline. To Search Engine Journal he said they needed to consider bringing on additional partners.

With all three still in day jobs, the to-do list could not be cleared. The areas Semrush named for investment in the Search Engine Journal interview, new initiatives, stronger content production and in-person events, overlap almost exactly with that list. The desk reads this sale not as selling at the peak of success but as three founders reaching the ceiling of a side-project structure first.

Getting it into sellable shape took two years

Through 2020 and 2021 the three prepared to sell. They put contracts in place for all content, free or paid, rewrote the terms of use for GDPR, rebuilt expense tracking and updated the founders’ equity agreements. They also traced who held each asset. The site’s domain was still sitting in co-founder Ian Howells’ personal GoDaddy account.

He calls that preparation probably one of the most important periods in the company’s existence and leaves the lesson that the less organized a business is, the harder it is to sell. A business started on the side carries the ease of its start forward as later debt. A single line about whose name the domain sat under connected directly to whether the deal could pass a public company’s legal review.

From LOI to closing took about six months. He describes the due diligence as long and painful, while also writing that Semrush was patient.

Of the $1.8M, $720K was parked in the 18 months after the sale

Laid out again, the 10-Q reads as follows.

Paying 40% of the price across 18 months makes sense from the buyer’s side. What follows is inference: the timing of payments looks like the buyer’s way of checking whether members stayed once the founders stepped back. In a community where 95% of members arrived by word of mouth, the three founders’ names and relationships brought those members in, and the three were set to reduce their involvement after closing. The holdback is the price of that uncertainty.

The goodwill ratio says something too. 67% of the total is attached to no specific asset. Content is amortized over four years, booked on the assumption that course videos lose their value within that span. What the buyer took on in countable form was a third of the whole, and the rest paid for the place and the name.

When a sale of this shape holds, and where it stops

Among paid communities that sold, Freelance Writers Den, a community for writers, went for a six-figure sum. On the side of capping membership deliberately and keeping going, there is the record of The Lab. Backlinko, a blog Semrush also bought, is a different shape of buying content.

The conditions this case supports come down to three.

• Charging from the first day travels by referral only when the operators’ names already carry trust in that industry
• A high holdback ratio appears only when members came through the founders’ personal relationships and those founders leave after the sale
• A side project reaches a sale only when years can be set aside in advance to sort out rights and contracts

The limits need stating. The price and its breakdown exist only in the buyer’s disclosure, and how much the three founders took home, or how they split it, is not public. The revenue figure stitches together the founder’s own “ARR just under $1M at the end of 2019” and an outside write-up’s “about $1M a year,” and is not an exact figure from just before the sale. The closing date also differs by two days, February 21 in the essay and February 23 in the 10-Q. On staffing, the essay names two hires while the outside write-up counts three contractors, so the sources do not line up.

A place that filtered people with a $99 fee ran for six years with its order of magnitude frozen, and ended up on a public company’s books as $1,206K of goodwill. Most of the price attached to the part that cannot be counted.